Gold Stalls Rebound Just Under Key Resistance

<p>Gold (daily chart) as of February 27, 2013, having been largely range-bound between 1530 and 1800 for the last five months, has made a tentative […]</p>

Gold (daily chart) as of February 27, 2013, having been largely range-bound between 1530 and 1800 for the last five months, has made a tentative pause in its rebound of the past week and has stalled just under key resistance around the 1630 price region. This pullback to the upside occurs within a strong short-term bearish trend (within the current trading range) extending back to the October 2012 highs near 1800. The short-term bearish trend has shown regular breakdowns and pullbacks to the upside in the past several months. The most recent breakdown occurred in mid-February, when price broke down below the key 1630 support level, which was also an important 61.8% Fibonacci retracement level of the last bullish run within the trading range.

After that breakdown, the 1630 prior support level has now become a major resistance level. In the event of a turn back to the downside to resume the bearish run within the range, the clear downside objective resides around the 1530 price region, the bottom of the trading range. On any further breakdown below the range, key initial support resides around 1475. To the upside, a breakout above 1630 resistance should find further resistance around the noted bearish trend line extending back to the October 2012 highs near 1800.

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.